Consumer Law

Credit Card Company Fees on the Rise

By Brian Wolfman

New credit card rules go into effect today. (And others will go into effect in February, when new Congressional legislation becomes effective.) Today's rules are relatively minor, such as giving consumers more time to pay their bills. Next year's changes are broader, including rules that will restrict over-limit fees and marketing to students and young people. So, the credit card companies are looking for other ways to make money (which is what profit-making companies will do). This article in today's Washington Post explains that credit card companies are instituting annual fees on accounts that previously did not impose them and increasing interest rates and late fees. The article quotes a spokesperson for American Express saying, in business-speak, that the new legislation prompted the moves: "The reason why we did it is to be responsive to the business and economic environment, which obviously included the recent regulatory changes."

Jeff Sovern made mention of this phenomenon briefly in a post at the end of June. Jeff questioned whether the coming legislation was the real cause of the fee and rate hikes.

Full post as published by CL&P Blog on August 20, 2009 (boomark / email).